Mostly Positive
James Buy Sell posted every Saturday. Inbox every Monday
Kew
Kew
Toorak
Glen Iris
Brighton
Malvern
Mid Year Review
We ended this month with six buy-sell transactions, exceeding $32 million in total. Notably, four of these were off-market deals, and four involved multiple agents, with two in Kew, one in Malvern, Brighton, Glen Iris and Toorak. As we head into the mid-year break, this week stands out as a positive period in both the calendar and financial year.
Market
The market has shown significant improvement compared to the challenging conditions reminiscent of the Global Financial Crisis (GFC) in the latter half of 2022. This positive shift can be observed in our 2023M1 and 2023M2 auction test results. However, it remains inconsistent and volatile.
Interestingly, an increasing number of our multi-agent selling assignments are attributed to two key factors beyond the usual three D’s—death, divorce, and duties (taxes).
Managing Life
In the pursuit of success, it’s crucial to question the notion of upward mobility. Does reaching for an $8 million milestone truly equate to progress, when it translates into larger debts, more work hours, and less time with your loved ones in the newly acquired home?
Consider an alternative approach: Investing $5 million, freeing yourself from debt, and reclaiming time by reducing your work schedule or extending your holidays in France. Numerous studies reveal that once basic needs are met, increased wealth does not necessarily lead to greater happiness.
While keeping up with societal expectations benefits real estate agents and state treasuries, is it truly the best choice for your family? Perhaps the landscape is evolving, yet the fundamental aspects of life remain unchanged—still revolving around the core themes of death, divorce, and duties.
Could the path to fulfillment lie in spending less and embracing a life of meaningful experiences?
Managing a Reno
In the past month alone, we have encountered three more off-market selling jobs where clients have opted against significant renovations, as well as two cases where they are willing to sell, instead of renovate, if we find them the perfect home.
While this trend benefits our business, it poses a ticking time bomb for the economy, as Australia heavily relies on the construction industry and faces a pressing need for new homes.
The current state of the supply chain has transformed the once robust building industry into a realm of mistrust and dwindling opportunities. Renovators are abandoning projects in droves, witnessing homes they purchased with intentions of investing $1-2 million now requiring double that, with costs potentially soaring even higher, given the absence of fixed-price contracts.
To address these challenges, we present a solution: Richard Collins, a highly experienced building consultant. With a lifetime of expertise and a family lineage of builders, Richard brings unmatched knowledge to the table. His association with our firm is not driven by financial ties, as he operates on an hourly rate.
Richard’s insights on cost control and quality preservation can save hundreds of thousands. He will fearlessly advocate for your interests, devoid of pretence but rich in loyalty.
Moreover, we understand the toll that major renovations can take on mental health and relationships. To mitigate these concerns, we offer an alternative: assisting you in finding a home that requires no or manageable renovations. Instead of saving a million dollars on the purchase but spending double on renovations, we propose considering more expansive homes that are easier to renovate.
Together, let’s navigate this evolving landscape and redefine the way we approach building projects.
Multi-Agent, Off-Market, On-Market
In any market, innovation finds its place, and amidst the critics, there is a space for multi-agent systems. Remarkably, every home we have sold, well over a hundred, involved the collaboration of multiple agents.
This week, we acquired a property through a multi-agent approach, even witnessing other esteemed agents like Rob Fletcher from Forbes and Marcus Chiminello from Marshall White embracing this system by sharing the listing. The utilization of multi-agents extends beyond our endeavors.
Moreover, the property we sold at auction on Saturday initially sat off-market with no interest. However, leveraging the rising market in Boroondara and a stroke of luck, we successfully transitioned it to an auction and teamed up with another agent.
Congratulations are due to James Tostevin, the agent who sealed the deal. Despite occasional disagreements and differing strategies, James’ resilience and work ethic are truly admirable. His example serves as a reminder that as we age, our vitality need not diminish. Well done, James.
These experiences exemplify the importance of adaptability and collaboration in achieving success. As we navigate the dynamic landscape, let us continue to embrace innovation and learn from the resilience and dedication of those around us.
JAMES Buy Sell TrustBox
In addition to our successful Off-market and Multi-Agent approaches, we have introduced a ground-breaking method of quoting known as Trustbox. Developed over the past year, Trustbox aims to instil greater trust and meaning into our quotes, benefitting both buyers and sellers.
When marketing homes, whether on or off-market, we ensure the following components are included within our Trustbox:
- Authority
- Contracts
- A transparent Statement of Information (SOI) or Real Price guide
Here’s how Trustbox works for buyers and sellers:
Once our selling clients establish a firm price, typically after the first week, our SOI transforms into a Trustbox.
- Offers below the price range are not accepted.
- Offers within the range are referred to both the sellers and other potential buyers.
- Offers above the range are treated as potential sales or sold directly to the buyer without referral.
In the off-market realm, many agents struggle to execute effective sales strategies. They often beg for offers, promise updates, and handle negotiations with less transparency, regardless of the offer’s quality. This lack of trust not only proves annoying but also fails to elicit the best possible offers, particularly in the current market conditions.
Trustbox, on the other hand, brings forth several advantages:
- It encourages exceptional offers from buyers.
- It provides certainty to the best-suited buyer.
- It builds trust between agents, buyers, and sellers, fostering a more transparent and fruitful relationship.
At James Buy Sell, we believe in empowering our clients through innovative approaches that prioritize trust and optimal outcomes. Trustbox represents a significant step forward in revolutionizing the real estate industry’s quoting practices.
Evidence of success in Trustbox method: This week Kew was sold above the $3.6m to $3.9m Trustbox quote – having been bought in 2020 by James Buy Sell for the current owner at $3.15m.
Not every home is best served by auctions.
On the Kew home we used a multi agent process – congrats to out of area agents; Tamsin and Zali from Shelter – it was off market – and the buyer was able to offer and it was accepted, without haggling, under our Trustbox method.
Gina today at an unusual off market with nice guy Tom Staughton from Kay and Burton.
James Buy Sell is proud to announce the appointment of Simone Clarke to the role of CEO of James Buy Sell.
Truth is Sim, or Simbo as she is affectionately known, has been running the team (sometimes nearing 20 including part-time and contractors) for years and this is really an acknowledgment of respect and appreciation, more so than a new appointment. Well done Sim.
A great Saturday night in June with some past clients Nachschon, Michal, Alon and Laura celebrating their recent Bayside purchase and settlement at Ten Greek Plates – Martin Street Brighton.
You really do meet some interesting people in this business and yeah there are some tough times, but the good times far outweigh.
True Story: Clients engaged us to find and buy a home for them – they lived in Asia – we looked for a year – they changed their mind. We said no worries – no charge. They were insistent on sending us some money for our time. We said thanks, but no thanks.
In the end they sent $10,000 to the morechildsurgies.com and Melbourne Homeless program we sponsor and that allowed a child like Daniel to walk again. March 2023 on the left and June 2023 on the right.
Jennifer and Jason thank you sincerely for the respect you showed us and the money you gave, that is making a big difference. Happy to work for you in the future if your circumstances re change again.
JAMES BUY SELL
our spring clients looking to buy your home off-market now
TOORAK big family home up to $18m
ARMADALE turnkey family home $12m
DOMAIN Downsizer ready to move in $3.5m
ALBERT PARK Investment $2.5m
GASCOIGNE family home $7m
GRACE PARK family home $10m
URQUHART/TARA Family Home $6m
HAWTHORN doctors rooms will reno $3m
JAMES BUY SELL
our spring clients looking to sell their home multi-agent now
Glen Iris family home
Multi-Agent - Off market
$3.5m - $3.7m
James 0417 003 333
Zali 0422 576 049
Forthcoming Family Home over 1/2 acre in Kew
Coming in Spring
Overall Market is Up but Volatile
2023 M1 Opening
Bidderman
1.5
Stock
LOW
Clearance
64%
2023 M2 May
Bidderman
1.8
Stock
LOW
Clearance
69%
Huge Difference in Council Market Strength
Stonnington
Bidderman
1.3
Stock
LOW
Clearance
65%
Bayside
Bidderman
1.6
Stock
LOW
Clearance
58%
Boroondara
Bidderman
2.1
Stock
LOW
Clearance
80%
What I mean by a volatile market is similar to that unpredictable and fiery relationship you may have experienced. You show up, unsure if it will be an amazing date or a complete disaster. That’s exactly what a volatile market feels like.
It’s a risky situation. Do you take the chance and attend the party, risking a public embarrassment but increasing your odds of a positive outcome? Or do you play it safe and stay home, opting for a text instead, where not much can happen? That’s the kind of volatility you face when deciding between participating in an auction or sitting tight.
Volatility occurs when the market is going through a turning point, and indeed, the market is currently turning. However, it’s not a universal and consistent shift. There’s no bell ringing to signal a definitive change, as it could easily turn back again.
In May 2023, we experienced our second consecutive upswing in the Inner Melbourne Top End market after a chain of five downturning markets.
So, what do we know?
We are dealing with low stock, extremely low stock, and our market relies on the balance of supply and demand. Therefore, a significant increase in supply during spring may impact Bidderman (the number of bidders per auction) and potentially lower the market by the time footy finals roll around. Then again, it may not. My guess is that the market will remain solid in the early stages.
Geographically speaking, Boroondara is currently a happening place and has become quite predictable. If you go to auction there, chances are you will sell. This trend has only recently solidified between the M1 and M2 markets in 2023. On the other hand, Bayside is much more hit-and-miss.
When comparing the Inner East to Bayside, our Bidderman graphic below, representing the first 30 auctions in our 100-auction test for May 2023, shows a notable difference. The numbers indicate the Bidderman at each auction, with green representing an immediate success and red indicating a pass-in or failure.
The Inner East boasts a Bidderman that is 50% higher than that of Bayside, resembling the difference between a Sydney/GWS crowd and a Demons/Saints crowd. We still have some way to go before reaching the levels of the Pies vs. Bombers crowds from early 2022 and 2015/2016. However, last year, we were lucky to even gather a crowd the size of a suburban bowls club at auctions.
Things are on the up, and the early signs for Spring are looking promising.
The market is strengthening. The results are volatile. The stock low and not increasing.
Micro
We have been to 4 homes in the last week to give opinions on price – the most since mid-last year and the markets – it’s really clear and simple what is happening overall, despite volatile individual results.
Overall, the market is creeping upwards but on the lowest turnover in a very long time. It’s volatile meaning not consistent and it’s that because volatility always occurs around directional change.
Some areas as you can see in our 100 Auction tests are on fire – like Inner East.
Bayside warmed today and Stonnington went back into the cooler at the lower levels.
Volatile.
However overall, the pressure is on Inner Melbourne buyers and will continue to build as stock remains low, and as the local, state and fed governments continue to have no housing policies of value.
AND as Xi, Philip and Vladimir do, whatever it is they feel they must do.
Macro
And when’s done is done, there are all the signs the Inner Melbourne property market will explode again once their handiwork smooths over.
Philip is playing with the middle Price segment by making people think twice about buying and selling where a mortgage is involved.
Xi affects Chinese people settling in Aus and once the migration floodgates open, the ripples from Inner East may become floods to the Bay where the Aussie Chinese high-end market is only in its infancy. Xi does affect Position. Why? The lack of private school places could be a catalyst for more Asian background communities to open and in turn, attract more Asian background people with more money and a need for high end homes near private schools. The Inner East is already at bursting point compared to Bayside, so does that make sense?
Vladimir is affecting the world’s supply chains and that is affecting the wealthy’s thoughts on business and also builds (Property) – when those issues are resolved, renovations will get back on the agenda and homes in need of a reno, will begin to attract volcanic bidding again.
It’s simple demand and supply = price change. We have no supply and demand is in a lull.
Buyers and sellers were on hot sauce in 2007, 2009, 2015/16 and 18 months ago, then the second half of last year they fell into treacle, but right now there’s some honey around (making prices volatile). It’s full steam ahead in the East and back on the hot sauce again.
What is happening in the markets on a PPP basis?
Legend: Red is a problem and green in good with amber mixed.
Position: If you were buying or selling a ready to move in home, top or bottom end in Boroondara then expect some action. Well that’s you Xi.
Price: If you were looking to sell a home needing a big mortgage in the $2m to $6m range in Bayside expect little, until you are prepared to give it away. Thanks Phil.
Property: If you have land in Stonnington and its higher end, say Toorak expect a 50/50 – may or may not sell – depends on right agent, right method and right price.
Mmmmm Vlad that’s you and wealth confidence and building chains of supply!
Mal and Gina, so we know you as buyer agents – what’s the “off-market selling” you do?
In a buy sell, on the sell, we manage the whole process. Our focus is price, strategy, presentation, agent selection, execution, and extras, all of which are largely ignored in many off-markets, big mistake.
Price: The most abused tool in your toolkit. Get it right and it’s off to the races, get it wrong and you’re mucking out the stables. Why is so little testing done on price prior to going to market? Why is your decision made on who tells you the highest number or who sounds the most credible, when neither of those is consistently the best strategy to get the best price.
Strategy: When the average bidders at auctions in this market is 1, why is the only strategy suggested by the agent quote ‘em low and watch ’em fly at auction. Don’t worry about the sales pitch of somebody else’s miracle auction, give me the logic on why 1 bidder auctions, quoted low, are a plus for you. They are not, they are efficient for the agent and good for the buyer.
Presentation: Why is there an unwritten law that if you are selling your home off-market: it’s ok to look less than its best? Some of our strongest arguments with our off market selling clients are about spending money on presentation. You need to do it, even if the agent says oh, she’ll be right. That’s total BS. Why would we go out on a limb if we didn’t know it makes a difference – why does an agent not push as hard as we do: turnover and lack of time.
Agent selection: You really wonder about some sellers when they say I am going with such and such, as I know her, or he is a mate, or he has been ringing me a lot for a long time (why isn’t he or she ringing buyers for existing selling clients). WTF. Would that cut it at work?
Does Ross Lyon or Brad Scott make their selections on mates or who is best for the job? The coaches they replaced have been hailed as hardly done by nice guys – but Ross and Brad are very different – a clear plan, good support and they don’t select their mate or who rings them up all the time – they select who is best for the job, after they have been through a series of tests.
Why narrow the field in your first act. Wouldn’t it make more sense to have more agents, bringing more buyers and wouldn’t it make sense to keep more agents on your side?
How do you feel when you are rejected? Pissed off and angry at who rejected you? Probably – so what do you think agents who didn’t get your job are saying to a buyer when asked about your home? Let them have a chance to sell it if they have the best buyer.
It doesn’t feel like rocket science, there is so much history and self interest in how some currently sell.
Competing: What do you want agents to compete on – promises or results. Huh? Why make your final selection on glossy brochures and a slick sales presentation – it’s a pointer for sure – but when all are slick and glossy (all look so similar) doesn’t it just become a case of mine is bigger than his, choose me.
What about bring me the offers – from multiple agents? Why not test credentials in an off-market competition? Agents tell you it’s all about competition to get you the best, well get them to compete. We compete all the time.
But be careful – if you can’t manage the public narrative, then multiple agents instead of a better deal, become a fight to the bottom.
Execution: For all the not so nice things you can say about agents – there is one huge plus – their ability to focus on cutting a deal. It’s brilliant. But what happens if that deal is not in your best interests right this second? There seems to be no pause and reflect button on our agent friends at times. We encourage pause and reflect and then accept or keep going.
Extras: How can your agent take the time to give you something extra when they have 6 to 10 campaigns running this week – sorry I can’t see you at this time or this time or this time, but I can see you at 10.57 in my office for 3 minutes – and you’re the client. The buyers must be getting less. Catch 22 – if they are not full on, then do you want them?
Solution: Let them do what they do best – call and call and call and combine them with someone who can bring strategies to the table like a mexican wave, another buyer, another agent and advice to hold until we get a competing buyer and more.
Real Life: This week the off-market above was a multi-agent home where we ran a mexican wave in Marketnews over the Easter weeks and sold in the low $4m’s having been bought in the high $2m’s during Covid – nothing done to it. It’s a great home.
Multi-agent Off-market began Feb 4 with a welcome meeting:
- Selling client was a reader of marketnews – unhappy with agent advice she had received.
- She rang us. We made a presentation to be open and look at all angles.
- We were given an authority, organised a contract, produced an SOI and gave access. The 4 off-market ducks.
- Gina replaced the styling with a new style.
- We selected to go off-market with a multi-agent strategy.
- We replaced the photography.
- We ran a mexican wave in Marketnews
- Solid interest in Week 1 from 1 buyer, via an agent.
- We at marketnews produced buyer 2 with solid interest in Week 3
- Selling client and agent and James Buy Sell meeting: strategy to make it happen as we now had 2 solid and understood buyers.
- An auction (we do love them when the ingredients are there) was organised over the phone and strong competition from mid $3m’s and on the market to over $4m. Agent did a great job. The buyer bought well.
- The buyer came from a marketnews mexican wave and looked at a beautifully presented off-market home and competed against another buyer from another agent – the brilliance of multi-agent.
- The total cost to our client was less than $10,000 for furniture, touch-ups, photos, contracts etc. and total agent fee was no more @ 2.2% split 50/50 with winning agent.
- Job done: Buyer bought a rare home well and the seller got what she wanted.
- Money: James Buy Sell Multi-Agent increase was $1.25 million or 45%.
Melbourne Median increase during the same time was 7.1% (reiv)
Aspendale Median increase during the same time was 9.5% (reiv)
Increase taking local agent opinion of value and not the result was: 21% (SOI)
The price in this volatile market was a record for area property type.
This graph above shows this and is to scale.
“If you’re thinking of selling don’t look past Gina and Mal for exceptional results. It’s their business to know how to stage a house and garden, know the best time of the year to sell in different areas, and they will know the key selling points of your house (and they can arrange for all of this to happen for you).
They know how to negotiate and more importantly, how to time negotiations.
They know the real estate agents and know who will be the right one for you. You’re in really safe hands and most importantly they’re honest – they will advise to not sell if the offer isn’t right.
They’re truly ‘on your side’ and advise you on how to get the best outcome for you. My advice: at the very least meet with them – you won’t be disappointed.”
Our Buy Sell Client on this Aspendale home
What real estate advice can look like
2021 Bought - $19m
2023 Sold - $23m
Normally we say nothing - privacy - but somebody else splashed it all over the papers. In 2021 we bought for our client. This week sold for a $4m gross profit in 2 years. Same home, same agent. In fact same clients we acted for on another $4m+ profit Toorak home previously. That's a +20% uplift as the Toorak median dropped 10%.
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